If you are an aspiring homeowner who wishes to buy a country house, you might have then heard of the United States Department of Agriculture (USDA) loan. The loans are commonly known as the Rural Housing Loans that offer no money down. They offer a different type of mortgage insurance structure that helps you keep your monthly payments as low as possible. Here is all you need to know about USDA Rural Home Loan program.
USDA Home Loan Program
USDA has its own housing service division referred to as the Rural Housing Service (RHS). This is where potential first time home buyers find a range of mortgage services. You will get direct loans, grants for various purposes and guaranteed loans. With these loans, you can purchase a home, renovate an existing home, refinance a home or build it from scratch. The main aim of USDA rural home loans is to motivate home buyers to purchase homes in rural areas. This gives the rural areas the needed economic boost.
Why is it the best for First Time Home Buyers?
The USDA Loans are probably the best loans for first time home buyers due to the fact that they were designed for the low income buyers. Low income earners might not have the ability to come up with the 10-20% down payment requested by home sellers. However, the USDA loan lenders do not ask for any down payment. This type of a loan is also efficient since most of the closing costs are part of the overall amount of the loan.
To qualify to have a USDA loan, the home you wish to purchase must be within the designated USDA rural area. The USDA eligible areas vary as you move to different states. However, the area must have less than 20,000 residents to qualify to be a USDA eligible rural area.
You must also meet the household income requirement demanded by the program. It is important to understand that the average income of a county might differ from another. This difference is also put into account. A credit score of at least 620 and a steady income are also important. This will help you prove to the USDA loan lenders that you can meet the monthly mortgage payments and the previous debts you may have incurred. The lenders prefer to see that your housing and other debts you may have not exceed 29% of your gross monthly income. You can go to websites like this one for more information.
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